Why have Canada’s broadcasters launched the Local TV Matters campaign?

Canada’s major television broadcasters are uniting to stand up for Canadian viewers and to protect local television now and into the future. The campaign is a response to the thousands of viewers who are telling us how much they care about local television in their communities. We encourage everyone who supports local television to join our campaign and be heard.

What was discussed at the CRTC’s December Consumer Hearings?

The Canadian Radio-television and Telecommunications Commission (CRTC) held special consumer hearings from December 7-11, 2009 at the direction of the Government of Canada. The purpose of the hearings was for the CRTC to provide the Government of Canada with a report on the implications of implementing a compensation system for the value of local television signals. The CRTC considered the views of the general public regarding the impact of such a system.

In its consultation on value for signal, the CRTC took into account:

• Its impact on consumers, and in particular, the impact on affordable access to a variety of local and regional news, information and public affairs programming; and
• How the application of such a regime would impact the various components of the communications industry as it adapts to the new digital environment, and in particular, the implications on current and emerging business models.

In a historic joint presentation on December 8, the CEOs from CTV, Global and CBC appeared together for the first time before the CRTC and delivered a consumer-first solution that provides affordable, accessible, and sustainable TV services for all Canadians. Click here to read more about the consumer-first solution.

As part of the process, the CRTC also opened an online discussion forum. Consumers from across Canada submitted comments and participated in discussions on a range of topics including the affordability of local TV, choice in services and access to local programming in a digital environment. Click here to read transcripts from the consultations.

What was discussed at the CRTC hearings in November?

The CRTC held hearings in November to discuss issues affecting the future of conventional television, including group-based licensing and whether or not the CRTC should put a system in place to ensure negotiation between the television stations and cable and satellite companies for the establishment of the fair value for local conventional television signals.

In the formal consultation process leading up to the CRTC hearings, a clear majority of the submitted comments to the CRTC (114,900 of the 173,000 total) were in support of local TV and its right to negotiate with cable and satellite companies. This overwhelming show of support confirms that local television matters to consumers. Canada’s major local television broadcasters – including CTV, Global and CBC – stood before the CRTC during the hearings to present their vision for the future of local television in Canada, including the implementation of a negotiation for value system.

For additional information about the November hearings, visit http://www.crtc.gc.ca/eng/archive/2009/2009-411-3.htm#0

Why are we facing a crisis in local television?

Although support from our viewers is strong, local television has been struggling financially for more than a decade, and now we have reached a critical point. Advertising revenues for local stations have decreased and the traditional model of free local television is unsustainable. As it currently stands, your cable and satellite provider collects money from you each month for our service, but pays nothing to local television stations for the programming we provide. We are simply asking for what is fair – that cable and satellite companies pay broadcasters for the service that we provide and that the viewers are already charged for.

What is “Negotiation for Value”?

Negotiation for Value (“NFV”) is a term used to describe a free market negotiation between cable and satellite companies and local television stations to establish the appropriate compensation to be paid by the cable or satellite company for the distribution of the local television station’s signal.  At present, your cable and satellite provider collects money from you each month for our service, but pays nothing to local television stations for the signals we provide.  This is not the same as “fee-for-carriage”, which is a term used to describe a regulated rate to be set by the CRTC for the distribution of local television signals.

Why are Canada’s television broadcasters concerned about the future of local television?

Viewers are telling us that they are strong supporters of their local television stations and we are committed to protecting and preserving local television in communities across Canada. But without a new business model, the future of local television is at risk. Now is the time for all Canadians who are passionate about their local stations to stand up and be heard.

Why don’t cable and satellite providers already pay for local television signals?

Since the inception of cable and satellite service, local television signals have been accessible to cable and satellite companies free of charge. Yet over the last five years, your basic cable bill has gone up more than four times the cost of living.

The Canadian Radio-television and Telecommunications Commission (CRTC) will be deciding the future of local television this Fall. One of the campaign’s concerns is that cable and satellite providers continue to charge viewers for our service, yet they pay nothing to local television stations. However, Canadian cable companies pay U.S. cable channels in excess of $300 million a year for their services, and these cable channels are not required to produce any Canadian content. We are standing up to change this system because we believe local stations deserve fairness so viewers can continue to enjoy local television programming now and in the years ahead.

Some cable and satellite companies are suggesting that my cable bill could rise by as much as $5-10/month because of fee-for-carriage. Is this true?

No – this is not true. The CRTC is considering allowing broadcasters to negotiate with Rogers and other cable and satellite companies a fair value for providing access to local television programming. How can Rogers and other cable companies make claims to a cost they intend to pass on to you when negotiations have not yet occurred?

The campaign is concerned that cable and satellite companies are misinforming Canadians. Cable and satellite companies are attempting to disguise their own self interests as public interest. We strongly oppose cable and satellite companies passing fees onto consumers.

What about the Local Programming Improvement Fund (LPIF) increase that the CRTC just implemented on September 1?  Isn’t that enough to save local television?

The CRTC created the LPIF in 2008. It is a fund that supports local programming for conventional television stations operating in smaller markets.

Against the CRTC’s direction (see http://www.crtc.gc.ca/eng/archive/2008/PB2008-100.HTM **line 357) cable and satellite companies chose to pass this cost onto you.

It is important to note, while the LPIF is designed to maintain and improve the quality of local television programming, the LPIF and the discussions taking place this Fall to negotiate a new business model for local television are two separate items.

Why can’t broadcasters use the profits from their specialty stations to support the local conventional stations?

Specialty stations need to be profitable to remain self-sustaining. If we take money from the specialty stations and direct it to our local television stations, we will also be endangering specialty television. Also, specialty stations are often owned by multiple shareholders, so taking money from one property and investing it in another isn’t as simple as it may seem. How can we expect the shareholders of one of our services to subsidize properties in which they have no ownership stake?

What is the difference between a specialty station and a conventional station?

Specialty stations have a specific theme or focus. For example: the Food channel airs food-related programming while TSN airs sports programming. Conventional stations on the other hand air a variety of programs that are more general interest in nature and usually include local and national news in addition to comedies, dramas, movies and specials like Flashpoint, Being Erica, Hockey Night in Canada, Entertainment Tonight Canada, Project Runway Canada, Dumont 360 and The Gemini Awards. Another difference between specialty and conventional stations is that specialty stations receive subscriber revenues from cable and satellite companies while conventional stations do not.

Why don’t broadcasters just invest more in local programming?

Local television stations spent more than $5.6 billion on Canadian programming over the last decade – almost $3.6 billion of it was devoted to local programming. Local programming is the foundation and what defines local television stations.

Don’t cable companies already spend lots on local programming through the Canada Media Fund?

No. The funds contributed to the Canada Media Fund go to independent producers to produce programming. After the programming is produced and the money spent, broadcasters then purchase the programs to broadcast on our stations.

I’ve noticed in the news that some people have referred to the issue as broadcasters wanting a bailout. Is this true?

Nothing could be further from the truth. Millions of Canadians still enjoy local television, so this is not a situation where broadcasters are producing an undesired product. In what other business would asking to be paid for your product be considered a ‘bailout’?

All we want is fair compensation from cable and satellite companies for our product. As it now stands, local television stations give their product to cable and satellite companies for free (we are not allowed to charge them). They, in turn, charge their customers for our service, but pass on nothing to the local broadcasters. This despite the fact that the vast majority of our competitors do get paid by cable and satellite companies for their signal (called ’subscriber fees’). Even more troubling, Canadian cable and satellite companies pay over $300 million a year in subscriber fees to U.S. cable channels, such as SpikeTV and CNN, which have no Canadian content requirements.

So no, this is not a bailout. We are only asking for what is fair. This is about securing the right to negotiate with cable and satellite providers for fair compensation for our product. We believe this should not impact consumers as they are already paying for our product, as they do for most other channels.